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Slowdown: Indian executives feel least vulnerable

By Ravi Menon in Bangalore
June 11, 2009 10:02 IST
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Industry executives in India feel least threatened by the economic slowdown or by prospects of an extended recession than their global counterparts. In fact, they are the most optimistic about a global rebound in economic fortunes, according to McKinsey's Global Executive Survey completed in April this year.

Over 36 per cent of the 1,630 executives surveyed in India in March this year expected an upturn in the global economy by the end of 2009, as against 34 per cent of North American business executives and 32 per cent of Chinese.

Asia-Pacific and Europe recorded 28 per cent and 24 per cent on the hope meter. However, about 62 per cent of Indians surveyed expected the world economy to rebound only by 2010 or later.

The survey indicated that, as the sub-prime contagion and subsequent meltdown in the markets wound its way into the economic system from November last year, Indians were more optimistic about a worldwide rebound than the rest of the world.

In the first leg of the survey conducted in November 2008, 66 per cent of Indian executives had expected the economy to recover by the end of 2009. This figure reduced to 50 per cent by January this year and 36 per cent by April, but was still ahead of executive perceptions in other countries.

"Indian executives are definitely the most optimistic in the face of a slowdown, which has seen banks collapsing, consumption falling steeply and import demand in the key US market being affected," McKinsey India's Managing Director Adil Zainulbhai said.

Reflecting the deepening despondence in the global market, only 12 per cent of all respondents expected a rebound by the end of 2009.

About 44 per cent expected a prolonged recession through mid-2010 and sub-trend growth through 2012. Around 34 per cent expected a moderate recession of one-two years, followed by structurally slower global growth. About 10 per cent expected a 'Japanese-style' recession lasting more than five years.

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Ravi Menon in Bangalore
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